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This Week in Tech 460 (Transcript)

Mike Elgan: It’s time for TWIT, This Week In Tech. Leo’s out today, I'm Mike Elgan filling in for him. We have the Technologizer, Harry
McCracken, he’s here. Along with CNET’s Lindsey Turrentine and Katie Benner from The Information. We
talk about major moves by Apple including Beats, Healthbook, Smarthomes and what's going to happen at WWDC this
week. Plus, Google’s crazy car and Microsoft’s crazy Smart
Watch. It’s all coming up right now on TWIT.

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Mike: This Is
TWIT, This Week In Tech episode 460, recorded June 1st 2014

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TWIT to get 2 bonus months with purchase. It’s time for TWIT, This Week In Tech, the show where we talk tech with some of the
smartest people we can find. My name is Mike Elgan,
TWIT’s news director and I am subbing for Leo Laporte who’s off today and we have a fantastic team of brilliant people handpicked by
me personally. Starting with the Technologizer, Harry
McCracken, welcome Harry.

Harry
McCracken: Thanks Mike, it’s great to be here.

Mike: Now before
we introduce the other people in the show in want to ask you about the Technologizer because this site is now reborn. You've been
famously with Time.com for quite a while, bringing a lot of street cred with
that publication in my opinion and now you're branching back out on your own.
You're re-energizing the Technologizer, tell us what you're going to do with that site.

Harry: Well I'm
kind of going back to basics. I was that time for a little over 2 years and Technologizer was part of Time.com so it was a tiny island
in an extremely large ocean of content. And I decided to leave Time recently
and the cool thing was I was able to take Technologizer back with me and I put it back on Wordpress. One of
the cool things with being a journalist today is you can work for a large media
company and also reach a lot of people on your own. So I put together a new
design. It’s not going to be completely different from what I did that time or
what I did when Technologizer was a standalone brand
but I'm going to try even less hard to kind of be a news destination. There are
all kinds of sites such as CNET and The Verge and others who are better for
news than I can ever be on my own. But then I came through an analysis, an
insight and – so I call it slow cooked content. I'm not going to try to do 40
plus a day. I'm going to point people towards good posts elsewhere and I’ll do
relatively little content but hopefully of high enough value that people will
notice it.

Mike: And that's
really one of the uber trends that's making Tech
Journalism and Journalism in general so great these days because people like
you are leaving the big mainstream publications and they're branching out into
sort of these kind of start-up mode of operations, ranging in size from you
know The Information, we’re going to talk about The Information in a sec, Technologizer and then doing the more in depth reporting
and it’s getting to the point where I think Technology Journalism is actually
becoming one of the best forms, the highest quality forms of Journalism. Also,
there's a lot of garbage out there, let’s face it but there's such good
Journalism these days. So I'm really excited about that. The truth is that
people don't go to Time.com and say “I want to go to Time.com because they have
the best technology coverage”, they go “I'm going to go read Harry McCracken”.
The individual columnists and analysts are the brand these days. And so you
know it’s great, you're going to bring your audience with you and I'm going to
be looking forward to seeing what you do.

Harry: And an
awfully high percentage of them, when they go to content it’s because their
friends or people they trust told them about it on Twitter or Facebook or
Google Plus. So although Time was a great place to be, I feel like the entire
web is the front door to Technologizer if my content
is good enough.

Mike: Absolutely
and it will be I'm sure. I've been following you for a long time. You and I go
way back to the PC Magazine Wars.

Harry: The old
magazine days.

Mike: You and I
were both competing against PC Mag, which was the 800 pound gorilla. But
anyway, welcome and congratulation.

Harry: Thank you
Mike.

Mike: All right,
also joining us today is Lindsey Turrentine,
Editor-In-Chief of CNET Reviews. Lindsey came all the way from slightly south.

Lindsey Turrentine: From Berkeley, yeah just a little
ways.

Mike: Yeah,
Berkeley. And so what have you been working on lately? You've been in the
business for a while, and we've had you on Tech News Today a bunch of times and
you are fantastic on that show.

Lindsey: Thank you,
thank you.

Mike: You seem
to know everything.

Lindsey: Well,
that's my job. I have to know everything. We’re working on a lot of exciting
things. Some of the most exciting things that we've done recently is launch CNET En Espanol close to
a year ago. Getting close to a year ago and it’s growing and growing and now is
the largest tech site in Spanish.

Mike: That's
fantastic.

Lindsey: …in the US
which is really exciting. It’s been a fun project and we're doing a lot of
interesting stuff about the connected home. So we cover appliances already in a
big way. We have this big facility in Kentucky where we do that and we're doing
some really interesting stuff that we're going to be talking about soon.

Mike: Yeah, I
bet in the sort of home automation world is really about to take off. And I
think that's really going to be a launch into the stratosphere tomorrow. And
we’ll talk about that later in the show.

Lindsey: Yes.

Mike: But that's
really exciting that you guys are all over that because that's really going to
be a major, major thing that all of are going to be talking about over the next
few years.

Lindsey: Yeah it’s
a very exciting time.

Mike: All right,
well welcome to TWIT.

Lindsey: Thank you.

Mike: And we
also have Skyping in all the way from San Francisco,
California, a few miles south Katie Benner who’s a reporter for The
Information. Welcome Katie.

Katie
Benner: Hey, thanks for having me.

Mike: Now you're
with one of the entrepreneurial poster children of the new age of technology
journalism, The Information launched by Jessica Lessin.
How is that going for you guys, you seem to be cranking out some pretty awesome
stories and sort of getting a lot of tension and generating a lot of scoops.
What’s it like to work for one of these entrepreneurial tech journalism
start-ups?

Katie: It’s
really, really great. The pace is incredibly fast because not only are we
reporting on news that's changing all the time and the tech industry, it’s so innovative and changing all the time. As anybody who has ever worked at
a start-up can tell you the actual business itself seems to become a new company kind of every four weeks. You know you grow and
you learn and you're always incorporating new information and new ideas about
how to run your business so this is incredibly good. It’s a good bootcamp for anybody who really wants to understand how to
make the media industry a better place and more profitable etcetera, etcetera.
I'm writing exciting stories, we love it.

Mike: Yes you
are and you personally have a background in Financial and Business Journalism, is that right?

Katie: That's
right, so I was at Fortune Magazine for seven years covering Wall Street so it
started out as kind of a you know fun beat – actually much like covering tech
today is where it’s exciting and things are changing a lot and you just hear
about new, new, new, growth , growth, growth. And then suddenly the financial
crisis happened and it became this extraordinarily fascinating thing to look
at. You know to re-examine all the assumptions, the people that had leading in
2008 and late 2007 and you know the things that people had missed because they
were just awash in growth and optimism about what's happening on Wall Street.
So this feels like a very interesting time to be covering tech. There are some
similarities for sure.

Mike: Yeah,
absolutely it is a fascinating time and I'm really enjoying what you guys are
doing at The Information. Well, let’s launch into the show shall we. Let’s
start with the wackiest story I think of the week, which is Google’s funky
little clown car. Harry McCracken what do you think? Why did they actually trot
out a car that has no steering wheel as a way to make people feel more
comfortable about self-driving cars?

Harry: Well, I
was kind of fascinated by it because a couple of weeks before that news came
out they had their first bit of that for their earlier self-driving cars which
were converted Lexus SUVs which had steering wheels and brakes and everything.
And so I was up to date on what they were doing and then it turned out that
actually no, they had concluded that was never really going to work as a model
for this and they have been secretly building an entire car from scratch to be
self-driving. Which I have to say, I haven't been in that yet but one of the
things that was comforting about being in the Lexus was because there were two
Google engineers in the front seat—

Mike: Licensed
drivers, what a concept.

Harry: … yeah and
they frequently explained to us that the whole was whenever the car came into
danger or something where you kind of did not want your car making decisions,
no problem there was somebody at the wheel who could take over in the blink of
an eye and steer you through it.

Mike: And of
course these cars are going to have – they're going to build a hundred
prototypes they say and those prototypes will have steering wheels and brakes.
You know the kinds of things that you want to be in a car. And the video I
thought was kind of disingenuous in a way. It has a single button so in this
particular prototype you push a button and it goes somewhere and you push a
button if you want it to stop if a squirrel runs out the road or something like
that. And it’s like “Wait a minute, how do you even tell it where to go?” I
understand that you can do this in a parking lot but it just seems like they
didn't really raise the basic issues of how this thing works. They just showed
how cool it is for people getting excited driving in a parking lot. Lindsey Turrentine, what do you think? Was this – yeah, I mean
they're obviously excited but—

Lindsey: Well, this
is Google’s way right, to just start with an idea and kind of just throw it out
there and say “Start thinking about this”, start to think about what this could
be like and get people imaginations going and I think, you know Google is at
it’s very basis all about the data. So they're seeing a future in which data
drives your car, you tell it where you want to go and it just does all the thinking
for you. I think that this is – there's a very long list of cultural problems
that Google has to get over and they know that so they're trying to start
early. But the thing that I've been thinking about a ton is that like – let’s
say that this gets used in the small capacity right, and we start using these
for essentially Uber.

Mike: Yeah.

Lindsey: You call
one and it takes you across the city. Not on a 50 mile trip but just to the
grocery store. But what happens if you do need to take over at some point and
if this became a huge cultural norm, how do people get the hundreds of hours
behind the wheel that they need to be able to take over safely when they have
to?

Mike: Yeah.

Leo: Because I
don't think we’re all going to be in self-driving cars in ten years. It’s going
to take a lot longer than that.

Mike: Yeah, well
I tend to think that this is going to be a gradual thing. We’re looking at
super cruise control you know.

Lindsey: Yeah,
exactly.

Mike: We've
already got that to a certain extent. The high end cars, the rich people are
much safer than poor people because they can buy one of these high end cars and
if somebody slams on the brake in front of you, in fact Vic Gundotra of all people did a commercial for one of the big car companies. I don't know if
you remember that, where he said “Oh, this car saved my life because I wasn't
paying attention and the car in front of me slammed on the brakes and the car
automatically slammed on the brakes”.

Lindsey: Yeah, for
sure.

Mike: And so
that kind of thing, that kind of thing is actually easy to do relative to the
self-driving car thing because the self-driving car thing is all about maps and
sophisticated maps. Yes, Google has completely mastered Mountain View,
California.

Harry: Oh it’s
great in Mountain View.

Mike: Yeah.

Harry: Petaluma,
probably not so much.

Mike: Yeah and
you know we’re talking about a couple of thousand you know miles of road that
they've mapped, in fact there are millions of millions of millions of miles of
roads yet to map. And of course lots of companies are working on this kind of
technology. All the car companies are working on it. I personally think that
this car has two purposes. The first is to show that you can't just slap
electronics on the roof of a Lexus or a Prius. You need sensors down below. You
need the whole car purpose built for self-driving if you really want to do it
right. And the second thing is, I mean look at this thing, it has a face on it.
I mean who can stay mad at this car? It’s like, you
know they're trying to make it so warm and fuzzy that when they go to you know—

Lindsey: This is
the not – it’s the opposite of you know the sort of muscle car experience that
we all get advertised to all the time.

Mike: Yeah.

Lindsey: And I
think this is what Google’s trying to go after, like “Hey this is not – we’re
not trying to replace your amazing driving experience. This is functional, it’s
something that'll make things easier for you and it’ll be fun. Like if you're not
a person who loves driving or you're a person who need convenience and you want
to just text in the car, you can do that safely because you're not driving.

Mike: Yeah,
exactly and of course anything that the self-driving car does, you run over an
old lady, you hit a dog, whatever it is that you do, whatever the car does,
whatever it is, Google’s algorithms do frankly, you're going to be liable. When
these things hit the road, you're not going to be able to sit there and drink
Scotch and playing Backgammon and just like not even worrying about what's
going on. You can be liable—

Lindsey: That's a
bummer.

Mike: …I know, that's the bad news.

Katie: I think
this is where the data comes in to play because I think that one thing that all
the self-driving car people are thinking about Google especially and even some of
the automakers is how do we make this the norm and I
think the way they do it is by getting insurance companies on board. So the
insurance companies are very, very concerned about data and if data can prove
that it’s cheaper and safer for the insurance companies, they're going to
encourage more and more and more automation in vehicles. And so we’ll be pushed
along as a public to accept technology that we might not - that we might feel
as kind of icky right now just because it will be cheaper. I saw a really
fascinating speech given by Dan Geer who’s over at In-Q-Tel and he has done a
lot you know he’s just sort of one of these guys who thinks about big tech
problems. And he was like “There will probably be a day, someday not now but
not too far away where none of us will really be able to afford to own and
drive cars that don't have some level of extreme automation because the
insurers will demand it.” And so Google wants to make this friendly car and
it’s really cute and they want to convince us that we want to drive. And the
scariness and that sort of weird sci-fi Orwellianess of a self-driving car we can get over it with the face. But in the background
they're also you know thinking very hard about how to not just make us feel better
about it but to force us to do another [?].

Mike: I
personally want a self-driving car that has a sort of ventriloquist dummy
looking Johnny Cab kind of face there that's like talking to me and being
crazy. I think that would make it all worthwhile for me personally.

Lindsey: Yeah,
would you like it to also speak out?

Katie: I want a
sofa in my self-driving car.

Lindsey: A sofa, a
dog bowl.

Mike: Sure, yeah
absolutely.

Katie: Yeah, I
was very disappointed to see that there wasn't more comfortable seating in this
thing.

Mike: I know,
put a bed in there or something. You know put a hammock or something in there, that would great.

Lindsey: You know
the biggest practical thing that I keep thinking about the self-driving car is
“Gosh, I work all the time, if I had a self-driving car I would ever have a
chance not to work”. Like right now driving is when I just don't work.

Mike: In fact
for you I think you should get a self-driving office because imagine if you –
you know you could go to like, you could drive to the other side of the country
to attend a trade show or something and slave away the entire way. Have a desk
in there.

Lindsey: Nirvana.

Mike: Yeah it’ll
be fantastic.

Harry:It’s weird being in a place where in can’t do email and
whatnot, which is what a car is for me.

Mike: Yeah, yeah
exactly. Well remember when airplanes were like that. I used to love flying
because it was like “Nobody can call me, nobody can reach me on you know email
or whatever.” Those days are gone. Well Google’s up to a lot more than just
self-driving cars. They have according to reports, rumors, whatever you want to call it they are working on Android TV to replace Google
TV. Harry McCracken what's the different between Android TV and Google TV?

Harry: Well the
rumors are a little fuzzy. I mean it sounds like Android TV, A, it plays up the
Android brand which has a lot of momentum in and of its own. And B, gaming is a
big part of itself. It’s a little reminiscent of what Amazon is doing with Fire
TV, which is a TV box but one which was recently serious about gaming and I
mean depending on how you count this, this is Google’s third maybe fourth
attempt to come into the living room with a device because there was Google TV
and there was Google TV 2.0 and there was the Nexus Q which was that magic 8
ball looking thing which I think they gave up on before they actually anybody
paying for it.

Mike: Did
anybody get that except Google IO attendees?

Harry: They gave
it out at Google IO and then they sort of slowly decided that maybe it wasn't
going to work out after all and gave up on it. Of course I mean really there
are only, I mean depending how you count, there are I think either four
companies that have succeeded at TV box. Those companies are Roku, Apple with the Apple TV, and probably Microsoft and
Sony with the Xbox and the Playstation which are both
used hugely for streaming video. Other than that, there have dozens if not
hundreds of TV box, those which have come and gone over the years—

Lindsey: Comcast
has been very successful.

Harry: Comcast
yeah.

Lindsey: And it’s
limited but it’s appealing.

Harry: I guess
Comcast has been successful, I mean I think they've managed to sell a lot of them.
I kind of curious many are actually in use because there were a lot of people
who were like “This is incredibly cheap, I'm going to buy one.” And how many of them stayed in use, I'm not sure.

Mike: So it
seems to me that one of the fascinating things about these reports that we’re
hearing again, these are – all this information is not something that Google’s
announced and is something that I think some of us are expecting at Google IO,
which is not for some time. When is Google IO, June?

Harry: End of the
month.

Mike: End of the
month, that's right it’s June already. End of this
month.

Lindsey:Junesanity.

Mike: Almost a month.
And one of the big differences between this and the Fire TV is the Fire TV is a
product. You go to Amazon.com and you order one and they send you a box and it
has gaming and it has apps and it has some other things that are associated
with your Prime account. Whereas this is a platform for other people to build a
box, for other people to build a TV with the stuff built-in but what they have
in common is a strong emphasis on games. So does anybody think that Google is
going to become a powerhouse in gaming?

Lindsey: I think
that Google wants to set itself up to be a powerhouse in gaming if that
opportunity arises and it wants to have an opening in anything. I also think
that this is Google’s way of continuing – I mean I am pretty impressed that
they keep trying this after the Google TV you know.

Mike: Fiasco—

Lindsey: Fiasco,
try and try again. But the different between the two, or at least the rumor difference is that Google TV tried to marry the
traditional television and then the streaming television experiences and this
is just the latter right. And so it’s really opening up a platform if you can
get people in to watch streaming tv seamlessly. And then once those games start to come over the internet, become
more powerful, there's already that sandbox for it.

Mike: Yeah,
absolutely. And Google IO last year, you were there. I don't know if you went
to Google IO last year but they were talking about you know, using Google Plus
as the sort of communications medium for their coming game platform for Android.
And I wonder how that's going to happen, you know
whether it’s going to be Google Plus, whether it’s going to be Youtube.

Harry: Well the
latest rumors are that maybe they're moving forward, they're going to be less
aggressive about Google Plus being the platform for everything and maybe saying
you know Google has all the services and we’re not going to, sorry Mike I know
you like Google Plus—

Mike: I do.

Harry: …we’re not
going to shove Google Plus into the face of the people who don't necessarily
want it.

Mike: Yup, yeah
I mean that's essentially my – I guess it’s somewhere between an assumption and
sort of an analysis of the situation which is that Vic Gundotra really drove the Google Plusification of everything
in the company. And from within Google, what that means is that no matter what
division you are in, no matter what division you are in charge of Google Plus
is more important than you. And you had to change your product for the
objectives of Google Plus rather your own objectives. And so Youtube and so on. And I think there's got to be,
and again I'm not a fly on the wall I don't know what's really going on at
Google but that's got to be why Vic Gundotra left to
a certain extent. He burned every bridge there was because he was the guy, you
know forcing everybody to do stuff they didn't want to do. And so yeah, I think
that that's the days of forced integration that's widespread and aggressive are
definitely over. And it doesn't affect Google Plus at all, I mean as a social
network, who cares. Those things were all for the
theoretical benefit of other Google properties.

Harry: It might
help Google Plus given that among people who don't love Google Plus it doesn't ever
create reputation partially because people think of it as something being
forced on them. If Google Plus succeeded because it was good, which it is in a
lot of ways it might good for everybody.

Mike: Yeah
absolutely, well Google is also having an interesting time in Europe these days
because they often clash with the Europeans over a variety of things. Things
like Street View, car and so on. The most recent clash is over the right to be
forgotten. So some guy in Spain had some financial trouble some years ago. And
then fast forward he cleaned up his financial act and he got to the point where
he was you know, he was doing fine and he didn't have you know all these debt
and so on. But when you searched for his name, you could find, you know he looked like a financial basket case and it harmed his reputation.
So he took it to court and he won. And what that meant was that Google is now
required to enable European users, because of one Spanish judge by the way, to
enable European users to submit a proposal that they have their information,
the link not the information, the link in Google, in Google search engine and
every search engine to be removed. So this affects not only Google, Google lost
the case, they were the, I guess the defendant to whatever you want to call it
in a law suit. But they now have to comply, they have done so. So this happened
some time ago and now they've actually put up their form saying if you want to
remove your link, here's the form, fill it out and thousands of people have
done that. Now this is a controversial thing, Katie Benner what do you think of
all this? I know you have a point of view on this.

Katie: I think
initially it feels like a very good idea because I think people are trying to
find ways to take back control of their online identity. I mean it’s why things
like Snapchat are successful, things that disappear so that we don't feel stuck
with everything we do online. It gets into a very tough territory essentially,
sort of censoring the web. So I think Google if they decide to take down a
link, they're also going to note that a link is disappeared and how many links
do they take down, what does that mean, who are they rewriting the history for,
is it useful to have some of this information available, how do they decide.
This is just such, such tricky territory so I think it will be – I think it
will actually be a lot harder than people think for this to be successful.

Mike: Absolutely, I mean does anybody in this counsel of wisdom support the European
decision, this idea of right to be forgotten? Is this something that has value
that outweigh the complications?

Lindsey: I've been
thinking about it a lot because I mean we all probably have links we’d like to
take down and I don't think it’s a good idea. For one thing I think that
there's an entire industry that will grow up around it, that will be, you know you'll
find a consultant who knows the right language to use in the form and all of
the right tactics to take to get certain things taken down regardless of
whether it’s a good idea or it’s really something that is, you know a link
that's no longer relevant. And it doesn't seem like there are very good
guidelines yet about what makes a link something that deserves to be taken off
of Google.

Mike: Yeah,
that's one of the crazy things about this, is the European regulators have
constantly told Google “Google we don't trust you, we don't trust you with your
Street View car. We don't trust you with your, you know with you listing your
competitors on your search engine. We think you're favoring yourselves.” They
go on and on about how they don't trust Google and then in this ruling they say
“But you know what, you're in charge of deciding what's a good link, what's a
bad link, what's a relevant link, what's an irrelevant link. That's all up to
you Google, good luck”

Lindsey: Yeah that
seems crazy, I mean it seems like if that's going to happen and maybe there's a
future in which there's a way that we get certain things taken down so that you
know public interest in something that is not true doesn't drive untruths to
the top.

Mike: Right.

Lindsey: But there
needs to be legislation around that, it can't be up to Google.

Mike: Right, and
to me the—

Katie: And also –
I was going to say there are also companies already that exist that do
reputation scrubbing online and of course I mean what the EU is saying that you
shouldn't have be like a really wealthy person who can hire reputation.com or
one of these services. But this is something that already exists.

Mike: Yeah
absolutely but one of the things that's really – the worst thing about this and
let me frame this in a way that sort of reveals it for what it really is, what
they're asking Google to do, so there's a beautiful situation that exists, we
have an internet right? It exists, we have search
engines to help you find the things that are on the internet. So what this
ruling does, is it say “Okay Google, we want you to
lie. We want you to have your search engine not reflect the actual internet but
to reflect whatever’s left over after everybody who has the resources, the time
or whatever to scrub it” and by the way this is only for Europe. So to me,
Europe is going to have an increasingly inaccurate search engine. And Europeans
who are savvy are going to find ways around it. They're just going to use the
American version of Google or some other version of Google. And in fact this is
what people in China already do, this is what you do
when you have a censored internet. You find – you use tools, various tools
which are freely available to get around what's there
and then the you know, again it’s another digital divide isn't it? Because the
tech savvy people, the knowledgeable people, the educated people are going to
get the real internet and then the average person is going to get a censored
version of the internet. It’s an awful state of affairs and I think Europe needs
to revisit this and not just allow one Spanish judge to essentially wreck the
internet for an entire continent.

Katie: Well keep
in mind this is Europe.

Harry: And who
decides what needs to be scrubbed?

Katie: You know,
this is very European, this is the same – the EU that regulate the way a tomato
can look before it goes to the market. I mean there is such an amazingly rule
bound kind of hide bound place. So it’s not entirely surprising.

Harry: And Mike
you're right, they sort of have been you know at war with Google for many years
over all kinds of stuff. I mean, it may not entirely be a coincidence that
Google is this large company had imported in the US which has so much impact in
Europe and there have been all these attempts to curate the European Google,
none of which have really taken off.

Mike: That's
right and they take a different tact and a tact that doesn't really work. For
example there was some years ago, French government has these cultural sort of
divisions or whatever you want to call them and they were freaking out that
Google was digitizing all the books and sort of kind of becoming this
powerhouse in the future of digital books, and so they wanted to do their own.
And it flopped and that kind of stuff is hard to do by committee. You need billionaires
to do that kind of thing. You need billionaires with Google Glass and VBrooms and private jets to do these things. You can't just
do it by fiat. Well we’re going to talk about Apple, it’s going to be a huge
week for Apple and there's lots of fact and also not so facts, not so big a
facts rumors if you might call them about what Apple is going to be announcing
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will thank stamps.com. It’s a fantastic service. Well Apple is in the news. They
of course are doing WWDC and I think Chad don't we have an early look at, you
know people are wondering where are they going to watch or not, we've got this
early look at a promotional video. Roll it chad.

Jim: From the
very beginning of time man has continually asked one question “[?], quehoraes?, [?]”.

Mike: This might
not be official.

Jim: What time
is it? Today, we Apple will answer that question. It is time for the iWatch.

Cookie: We found
users constantly reaching for their phones to check for the time and that is
the worst. So we figured why not, just strap it to your body.

Jim: Introducing our magical new product the iWatch.

Cookie: Now, not
only can you check the time, but you can check almost any other alert that your
phone could push to it. Wow.

Susie: The iWatch uses it’s built-in—

Mike: This guy
has a great voice.

Susie: …technology
to wirelessly communicate with your iPhone. This way, you can answer call with
ease even when your iPhone is in the other room. Syncing your iWatch to your iPhone happens all in the background with
our iSync technology. All you have to do to set this
up is pair your existing iPhone with your iWatch,
make sure the confirmation code matches, bump them together then put in the 16
character passcode into each of the devices. It’s really that simple. Repeat
after every charge.

Jim: We have
taken the iSync technology much farther than it needs
to go. You can respond to text messages without your phone leaving your pocket.

[laughter]

Jim: Resume
your latest ebook with a flick of a finger. Catch up
on the latest news headlines pushed directly to your iWatch.

Cookie: The
design that went into the iPhone—

Mike: Suddenly
he Johnny Iovine.

Cookie: …is unparalled. It’s hard to believe that we can even fit a
battery into this thing but we did, and it will last you one entire hour,
stand-by. You have never looked so attractive to the opposite sex. Yeah, it’s
that good. You can even use it when it’s plugged in. You can charge it, listen
to music and sync in with your iMac all at the same time.

Susie: Gaming
has never been more fun. Play your favorite games from your iPhone or iPad
right on your iWatch. Every existing game is
compatible? We've even added support for your made for
iPhone controllers. Never be away from Minecraft again.

Jim: But there
is one more thing, the iWatch comes in with a
built-in GPS aware pedometer. We take privacy seriously and that's why we've
granted a live stream of your location to the NSA. Stop complaining, you love
the attention.

Harry: That's
only slightly more silly then a lot of actual smart
watches which exist today.

Mike: That's
right, that's right and speaking of which, everybody expects Apple to launch an iWatch of some kind. A band, something, they're going
to do it tomorrow Lindsey Turrentine.

Lindsey: No, no
they're not.

Mike: Are they
even going to mention it?

Lindsey: I don't
know, I mean I think they're going to talk a lot about IOS 8.

Mike: Yeah, I've
seen the posters.

Lindsey: And I
would assume contains some hints or some direction or there's going to be
something that we can sort of see in that experience and some of the other apps
and software that Apple will be talking about. They're going to be – the rumor
is that Apple will be launching a healthbook app that
brings all of your sensor based health kind of data into a single app.

Mike: Be like
Passbook maybe.

Lindsey: Yes, very
much like Passbook but for whatever you're tracking on your smart watch. So I
would assume that there would be some hints in there and I know that the
developers conference program has a lot of the program – the later program, the
law of the sessions, the names are still blacked out. So there will be
something but I don't think there's going to be hardware tomorrow. I really
don't, I think they're really focused on developers this year.

Mike: Okay,
Harry what do think? What are they going to talk about tomorrow?

Harry: I think
that a new version of OS10 and a new version of IOS are a given and that's a
lot to chew on right there. It sounds like Healthbook is real. Mark Gurman who writes for 9to5mac is one of
the few Apple reporters, if he reports a rumor, you can't have one hundred
percent confidence he’s right but he probably right and he’s read an awful lot
about this stuff. It would expect some hardware but probably not anything
revolutionary. You know there might be new Macbooks.
It would be nice to have a new Macbook Air with a
retina screen someday. That would be nice but people always think that Apple
rolls out huge world changing hardware devices at WWDC and they forget that the
original iPod was not at WWDC, the original iMac wasn't, the iPhone was not,
the iPad was not. It’s like the second or third device in that category they
announced at WWDC and I would expect something along those lines tomorrow.

Lindsey: They don't
want to steal attention from the major hardware rollout and they don't want to
mess up their supply chain either, right? So unless they're ready to sort of
hit the ground and start selling something immediately, they're really unlikely
to do it.

Harry: Which they
usually don't do in the summer anyway, I mean they did it with the iPhone for a
while but the iPhone slept into the fall. And this is an event for software
developers and if you are a software developer and you write for Apple stuff,
there's nothing you care more about than the next version of IOS or the next
version of OS10.

Mike: That's
right.

Harry: You don't
care all that much usually about the specific hardware that it’s running on
unless it’s something like a retina display or an iPhone with a larger screen.
Those kind of things do affect you and you care about
them.

Mike: Yeah, one
of the interesting things about the coming spaceship campus that they're
building. I think it’s the current deadline on that, and of course they're
already tearing up the ground and laying the foundation for that and so on in
Cupertino, is that they have an underground bunker where they're going to do
all their announcements. And so we know they're going to launch you know IOS 8
because we've seen the posters already, you know the, what's the name of the
conference facility in San Francisco where they do this?

Lindsey:Moscone.

Harry:Moscone West.

Mike:Moscone West, you could just walk in there, you know they
can't like kick the public out of those but the underground bunker is going to
allow them to summon journalists within short notice, 2 or 3 days maybe and
then they'll be able to go on any schedule they like. They don't have to book
it and you know, Moscone you have to book probably
what a year or two in advance and so on.

Harry: People
will that there is a mysterious event happening at Moscone West in a given week in June.

Mike: That’s
right.

Harry: And even
if it doesn't say Apple, people often can figure it out.

Mike: It’s
literally impossible to keep that kind of information secret and they—

Lindsey: Apple
already does that actually at their campus. When they have a smaller event for
journalists they'll just bring people in. They have a facility.

Mike: Yeah
little theatre kind of thing. So that'll be interesting. One of the – you
mentioned Mark Gurman, Mark Gurman broke the story this week that Apple’s discussing iPhone service payments. Now
he doesn't believe this is going to be a topic of a discussion at WWDC but
talking about a payment service. What they're doing is they're talking to
retailers about having a way to use your iPhone as a credit card. Now, Katie
Benner this is kind of a no brainer for me. I've been writing about this for a
long time, that you know when are they going to do
this. Thank you have phones that have finger print
readers on them. They have Ibeek, which is an indoor
location system that's perfect for indoor retail. They themselves have
innovated indoor retail stuff at their Apple stores where instead of going to a
cash register, they don't have cash registers they have people with blue
t-shirts. And so you just walk up to the blue t-shirt and you buy whatever you
want, you walk out and they email you your receipt or whatever. That's how
Apple wants to remake I think the world of retail and they have everything they
need to do it and the one thing that they have that nobody else has is 800
million credit cards. They have 800 million iTunes accounts that have active
credit cards associated with them which makes them, to me that makes them the
number one company that has the potential to dominate this kind of retail. Katy
Benner what do you think – this is going to happen when they actually roll out
some kind of mobile wallet system?

Katie: I mean I
have no idea what would happen but I think it solves such a big problem for the
retailers that I don't think it would be very hard for a company like Apple if
they chose the right retail partners to make this happen because at the end of
the day, we have these phones that we could go online but we’re not necessarily
shopping or buying online. There have been a lot of studies on this. Nobody
wants to input all that information into all of those tiny fields. And so if
you can make shopping as easy as it is to you know with your thumbprint buy an
app from the App Store. That would be great and if you think about the Apple
demographic, it tends to be pretty well healed so if they were working with you
know the Neiman Marcuses of the world or you know
name your retailer who really wants to have, to move goods online that stores
just simply do not. Right now we don't do a lot of mobile shopping, it would be a perfect solution.

Mike: Yeah we
had Mark Gurman on Tech News Today this week and
talking about the story and he was pointing out and emphasized and also
emphasized it in his article that it’s actually a really big problem because
each of these retailers has its own backend system. And the Apple system would
have to be compatible with those system so they have
to go on a chain by chain basis. So as he point out, they're going to go for
the big high end chains, you know the Neiman Marcuses and so on. And they're not going to go for the Targets and they're not going to
go for mom and pop shops either. So they're going to have to start it with the big
chains, establish what would amount to a standard and hope presumably that the
rest of the world sort of retrofits what they've got to support Apple when –
and if this works but it’s a fascinating story to a certain extent but it’s
also kind of boring story because this is inevitable. Apple, I believe is going
to do that and if this whole system, and if they didn't do it they would be
morons because it’s so lucrative you know, there's so much money involved.

Lindsey: Well they
need to do it soon because they still dominate market share you know for any
single device anyway.

Mike: Yeah.

Lindsey: But that
has the potential to wane a little bit right, as these become commodities and a
lot of people switch to Android and there's so much choice out there that if
Apple doesn't figure it out right now and get it out there with the next
iPhone, I think that then it’s in trouble. So now is the time.

Mike: Yeah,
absolutely.

Harry: I think
it’s been smart they've waited. Apple often does well because it swoops into a
category after other people have failed. And like Google Wallet has not really
gone much of anywhere, Square had a really cool app which I think they've
actually discontinued just because it’s hard to get traction with these things
partially because credit cards are actually a really well done way to make
payments easy and—

Mike: Well,
these people are comfortable with them right?

Harry: Credit
cards set the bar high and it’s not easy for a phone to be better than a credit
card, it’s actually quite difficult.

Mike: Yeah it
truly is and I think that one of the things that to your point Lindsey, that
Apple is going to do this sort of deal with the fact that hardware tends to
become commoditized and the competition is very intense and markets are very
price sensitive, is this purchase of Beats. Now, right off the bat, is this a
brilliant move or an idiotic move? What do you think?

Lindsey: I think a
lot of people think it makes no sense at all. I actually think that it’s kind
of a no brainer because what Apple does is it moves through these sort of
pipelines of it’ll launch a very glossy high end product for the well healed as
Katie said. And then over time, starts to do it in more colors, starts to do it
smaller capacities, you saw this happen with the iPod right. There was this
huge, beautiful, expensive, fancy brick that then got smaller and turned into
the Nano and a lot cheaper. So Apple is approaching
that with the iPhone and is now has multiple models and may have even more in
the future and it’s becoming a commodity product that is easily paired with
headphones. And it makes sense to put it together with a brand that is really
widely loved with a lot of shoppers. Even if we all kind of know or those of us
who read about it and we test all these headphones, Beats headphones are not,
they're just not the best for quality, they're not but they're the best for
brand and Apple loves that.

Mike: Yeah and
you wrote about this – yeah go ahead Katie.

Katie: Oh I was
going to say, Jessica Lessin my editor as The Information,
she wrote a great piece also saying that one of the things that Apple has to do
because of the commoditization effect on the phones is that they have to keep
things new and cool and make people want to come. And so by bringing Jimmy Iovine on board, they have somebody who could do sort of
amazing deals with the record labels. And who knows, I mean that could be – who
know what form it could take. It could be free music or could be the right to
share music or something else we don't know in terms of in the entertainment
space. But he is a very good deal maker. He’s worked with Eddie Cue for like
ten years, you know they've known one another for a
long time. He could be a good cultural fit there and that would actually bring
to Apple sort of an intellectual property and a steady stream of great
entertainment that a lot of other brands don't have.

Mike: As Eminem
would say, you forgot about Dre. Is he a good
cultural fit with Apple? I won’t make you answer that.

Katie: Please.

Mike: So you
know here's my view of it, from where I sit which is far away from Hollywood as
far as away as I can get, there seems to be that the music business has had two
big shifts in this business in the last fifteen years or something like that.
The first is the iTunes and the iPod but the iTunes model of selling songs
individually, digitally and this has a positive benefit for the music industry
and what they considered a negative benefit. The positive benefit is people are
actually paying for music instead of stealing it, which is super easy to do.
And the negative business is that people are not buying albums. I mean I
remember when you’d go to a record store and you'd buy an $18 CD. And you only
wanted the one song but $18 was the price to get that song. And that was a model
that the music industry really seemed to love. So Steve Job’s iTunes model was
a nuclear bomb in the music business where everybody used to get rich selling
song. The second one was called the 360 deal. This is something that hit around
2007 or so, which is that everybody realized because of digitization, music is
worth less because there's no scarcity with music. You have a digital, you can
download it a billion times and it’s the same file. It’s very difficult to
impose scarcity for the purpose of imposing revenue associated with that. So
they came up with these 360 deals. Instead of going to a superstar, a musician
and saying “Okay, here's the record contract, we’re going to make this much
money. We’re going to make platinum records and you get this percentage of the
music sales”, they instead go “Okay, here's the deal, you're going to promote
this, and you're going to sell this and you're going to have a cold brand with
that, and you're going to have this concert thing and that's the deal. Forget
about the music—

Lindsey: It’s all
about the t-shirts at the end of the day.

Mike: That's
right so – that's right and so the poster child for this concept of the 360
deal who’s probably done better than anybody is Lady Gaga. And her original
business manager actually said that music sells everything except music. In
other words, music is a great marketing vehicle and so let’s use that and that's the new model. And Jimmy Iovine has
been personally involved in that whole recreation. So the two people most
associated, maybe the three people, most associated with transforming and
evolving the music business are Steve Jobs and Jimmy Iovine. And to a certain extent Lady Gaga
and her business manager and so on. So I think that to a certain extent,
iTunes music is the real prize here and although it doesn't exist now in terms
of having the 360 deal stuff, they have been working on getting Beats music to
the point where that's the 360 deal service. In other words, while everybody
else is trying to sell subscriptions to streaming music, I think that Beats
music has been working on a system where that’s the place where musicians and
artists can sell everything except the music. You give the music away even to a
certain extent but then you know you sell – and of course Beats has been at the
center of this. If you look at what Lady Gaga has been making money on, it’s
been headphones. And concert tickets and all these things that have nothing to
do with music. So I really think that's what it’s all about. They bought
somebody who’s like the Johnny Ive of music business
right. A special person who’s super knowledgeable and irreplaceable and if he
doesn't come with Apple he’s going to work for somebody else. Probably Google
or somebody like that so I think that has a lot to do with this whole thing. So
you know Katie Benner, I don't know what the future of music is going to be but
it’s going to involve very cheap music and very expensive headphones.

Katie: Sure.

Mike: You know.

Katie: I agree.

Mike: And if you
look at how they've selling Beats, it’s been like you know there's a Lady Gaga
version of Beats and these this and that and the other and I think that's
really the future of what Apple’s going to do. And Apple want to be at the forefront of that so we’ll see how that goes.

Harry: Well I
mean, no matter what you think of the quality of Beats products, it’s one of
the few consumer electronics brand that's been created in the last 10 or 20
years that matters. And it went from not existing to dominating that category
amazingly quickly. And it sort of feels now that like Beats has been around
forever even though I think it’s about 6 years old.

Mike: That's
right.

Harry: Almost
nobody’s done that in a long time.

Mike: That's
right and the conventional wisdom is that you can make Beats for 15 to 17
dollars, sell them for 200 and they own 65% of the so called high end
headphones market. I mean what's not to love?

Lindsey: My kids,
they don't really know of any other headphones. I mean, they just go straight
to it and that's what you have.

Mike: And why?
Because it’s associated with celebrity and they really want the music and you
know, music fans really want to be into the bands and the singers and the
artists and so on. And there's a hardware component to that apparently.

Lindsey: Well there's
a design component to it too. I mean, I think it’s worth not forgetting that
Apple more than any other electronics manufacturer cares about the design
ethos. All their products and Beats is just like that.
I'm not saying they have exactly the same design or the same approach, but a
lot of the money that you're paying for is for industrial design and for the
colors and the shape and the fact that you want to be seen in the airport
wearing these.

Harry: Although
oddly enough, I mean all of the Beats products to date have designed by this
guy, he used to be Johnny Ive’s boss at Apple. And
already they've said that that company ammunition group will not be designing
Beats products moving forward and it will be intriguing to see who does design
them and whether the look and feel changes at all.

Mike: Yeah, they
need help on multiple fronts. One is the design and Apple can help with that.
And another one is they need help with Beats music because signing up for Beats
music is really clunky and really horrible. I tried to over the last couple of
days and I tried to get in on this AT&T deals so you could get like the
family deal that's five people for fifteen dollars. It’s a great deal but
trying to actually make it happen is very, very difficult and so Apple might be
able to help them with that. Well, another area where Apple is hoping to sort
of create new business is around home automation. And home automation is super,
super exciting. We talked about what you're doing with home automation at CNET.
And what Apple is doing according to the reports is really not that earth
shattering is it? I mean already, if you go to Kickstarter,
you look around at what's really happening in home automation, Apple’s kind of
already at the forefront to the extent that people create apps that run on IOS
first, Android second. And so they're already kind of an accidental leader and
they're trying to get in front of the parade a little bit so – but still I
think—

Lindsey: What's
going on here?

Mike: Well Apple
is prepping a platform which is supposed to come out at WWDC tomorrow and
they're talking about some APIs and it just sort of a light way getting in
front of the parade that already exists for home automation and giving home
automation creators a simpler way to embrace Apple’s coming platform for home
automation.

Lindsey: Yeah, I
mean I think there's a huge opportunity and one of the things that every time
somebody from CNET’s on a panel about home automation, one of the things that
we end up talking about is the fact that there are so many opportunities out
there but you don't want to have a separate app for vacuum and for your light bulb
and then another app for your thermostat and an app for your Smart Lock.

Mike:Which is exactly where you are today!

Lindsey:Which is exactly where you are today if you're even ready to sort
of invest your time and money in a pretty young category. And so what
Apple wants to do I think is just create sort of a Passbook kind of style,
let’s wrap it all up into a simple interface. I think as an aside it’s the
interesting would sort of create this there's an app for everything you know.
Millions of apps out there is now in a position to be like “Well, you don't
really need – let’s, maybe you don't need so many apps. Let’s try to kind of
get them corralled into a manageable space.” But the other thing that Apple has
going for it here is that it has a little bit of a head start with some of this
home automation because of its low powered Bluetooth in every single phone. Not
all Android phones have that or other phones. And so Apple’s already in early
with some of the Smart Locks. And if they can sort of keep all of the third
party developers and manufacturers thinking of Apple first, that's another
reason to buy into Apple ecosystem because it’s just going to be in a tiny
package and so you're a person who’s going to go out and buy a thermostat and
buy Smart Lights and buy a vacuum that you control with your phone, then that's
sort of an easy choice.

Mike: Yeah and
Apple was the first to support Bluetooth low energy, Bluetooth smart. It’s got
multiple, Bluetooth 4.0, it’s got a bunch of names but Apple is the first to
put that in a phone, the iPhone 4s. And since then every phone, tablet, laptop
has supported Bluetooth low energy. Now just about everybody does. The other
thing that they have Harry McCracken is really I think an underappreciated
resource is iBeacon because if you remember Bill
Gates built a revolutionary house years ago and the way his house worked was
you would put on this little badge, it says welcome to Bill Gates’ house you
get a badge or this little pin or whatever it was. It was a little, I guess it was RFID or something like that. It was some kind of radio thing.
And as you walked through the house, or so I've heard he hasn't invited me yet
for some reason, you can say “Oh I like Dr. Dre music” and everywhere you go in the house Dr. Dre music would follow you and the lighting preferences would follow you all
around. That's totally great with iBeacon, that's how
you want home automation to work. You want to walk up to the thing and have the porch light go on and the door to unlock and you know
have it know where you are.

Harry:iBeacon has very quietly been very important in retail and
things like stadiums. That's how a store or a stadium knows where you are and
it’s able to push stuff to your phone in a way that you know actually does
maintain your privacy because they only do it if you already have a
relationship with them and give them permission. And I think there are
potentially a lot parallels to what Apple might do in the home because iBeacon is mainly the fact that all the Apple devices
support Bluetooth L8. And Apple worked on standards and stuff so that other
companies can sell the Beacon equipment in stores and be confident that it will
work with Apple devices. So Apple doesn't necessarily have to build enormous
amounts of stuff on its own. Maybe all it does is it makes its devices the best
platforms for other companies to build home automation on which they already
sort of are already even without Apple having too much yet.

Mike: And I
think that iBeacon is a seriously underappreciated or
misunderstood or you know – it’s kind of below the radar. People don't
understand how it works. For example, people don't seem to know that Android
supports Androids. So if you're an Android phone – and Beacon’s really no big
deal, it’s also seen as sort of an NSA spy thing that sort of reaches into your
phone, it doesn't do anything of the kind. iBeacons are, to the best of my knowledge, incapable
of receiving information. thank you simply broadcast
here’s where I am and then you—

Harry: I'm here,
I'm here, I'm here.

Mike: That's
right and then the app is the thing that goes out to the internet if the app
has developed that capability. The app is the thing that knows you know the “Oh
you're Beacon xyz, Beacon xyz is in this particular location”, the Beacon
doesn't even know where it is. It just knows who it is to a certain extent. So
it’s a really fascinating technology and one of the things that's most fascinating about it is that it’s cheap. You can put Beacons all over the
place. Small business can put ten Beacons in it would cost them a hundred bucks
or something like that. You know so it’s a pretty exciting technology and I
think it’s really underappreciated for home automation and a no brainer. I'm
also curious about when the Googles and the Apples and the Amazon are going to
build home automation into their TV set boxes. Seems like an obvious place for
them.

Lindsey: So if I
think, and this is just pure speculation, but if Apple is actually developing a
television, wouldn't it make sense for them to start with one that's sort of
small and beautiful in a way that a Mac Pro’s screen is, where you've got the
retina. And then all of this home automation technology built right in to that
interface, into that television so the first places that you would think of
putting that is in your kitchen or some place that you would – or you would
already go to sort of check in and see what's up, who came in the back door,
when and are my back porch lights still on and all of that sort of built-in to
a sort of a smaller screen that's really beautiful and something that you want
to be part of the décor of your home. It might make a ton of sense.

Mike: Yeah, absolutely.
Well in just a sec were going to look at the latest outrage by the NSA and what
they're harvesting now. That's going to be exciting. Can't
wait to talk about that one. But first, I want to tell you about
Audible.com. Now Leo Laporte always says that he has
been an audio listener for a long, long time. I think I was an Audible.com
customer before he was. I think I signed up in the year 2000, believe it or
not. When Audible was actually a hardware – you were in high school Lindsey.

Lindsey: Thank you,
thank you for that.

Mike: It was a
hardware device that you would buy. It was this weird tear drop shaped thing.
And I remember actually demoed it to Regis and Kathie Lee back in the year
2000. And ever since then I've been an Audible.com listener and it’s a
fantastic service obviously. Audible has 150,000 titles to choose from. It’s
the world’s largest selection of premium audiobooks and spoken word content and
to me it’s a no brainer. Stories are an oral medium until very recently. And to
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it. Now, we have a special offer for This Week In Tech. We’re offering a platinum plan for Audible.com. This gives you 2 free
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2. And you know, there's a couple of new books that
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the Human Era by James Barrat. Now Leo Laporte interviewed James Barrat on the most recent episode of Triangulation. And this piqued my interest in
this book. This sound like a fantastic book and I haven't downloaded it yet or
listened to it yet but this sounds like a really, really fantastic book. And
Chad, can you play the sample there so we can take a listen.

Being suspicious of AI was painful for
two reasons. Learning about its promise had planted a seed in my mind that I
wanted to cultivate, not question. And second, I did not doubt AIs existence or
power. What was skeptical about was advanced AI safety.

Mike: Yeah, that
sounds pretty awesome. I for one welcome our new artificial intelligence
overlords. And I can’t wait to listen to this book. So let’s look at another
book that, to me, is a source of fascination and I’m going to get this on audible.com. It is
called The Man Who Knew Too Much: Alan Turing and the Invention of the
Computer. By David Leavitt. This, of course, the life
of alan Turing is one of
fascination for multiple reasons. He was just a genius as a child, who also, in
some way not so bright as a child. He is one of these
idiot savant children who grew up to become an amazing code breaker and of
course he was a homosexual who was persecuted for that. It is a fascinating
story and I hope they do a movie, but in the meantime The Man Who Knew Too Much
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recommend that everybody sign up if you don’t already have a subscription. For
14 years I’ve had audible.com and that is why I am such a towering genius now. That is why I have fun doing
the dishes at least!

Mike: NSA is
harvesting something new, I think. The gift that
keeps on giving. The Edward Snowden revelations just keep
coming from Glen Greenwald, who is the person to whom Edward Snowden gave these
documents and he is trickling them out to keep the information hot. Basically the NSA has been harvesting millions of pictures every single day. They harvest, and thousands of
them are facial recognition quality and apparently, according to the latest
revolutions they are gathering these pictures, they are putting them in their
data base and what they are going for is that they
want a data base where they can take a picture from a security camera, run it
though their system and say, “That is who this is.” It is really quite stunning how many hard drives do you
have to get at Best Buy in order to store millions of
pictures downloaded every day. It is just incredible.

Harry: Well the
government already has tons of pictures of us stored because the state
department has all those passport photo’s. They are not saying
if they are intermingling with what the NSA is doing
with those photo’s or not. I think it
would be silly to say this is inherently a terrible idea. If you do it the right way it
seems like this could be a good way to find people we want to find. The big question is always how
many innocent people might have been caught up in it.

Lindsey: I think the
other question is….

Katie: After 911 in
New York City put its own counter terrorism unit created a lot of initiatives
and one works with businesses all over lower Manhattan basically because all of these businesses have security footage and they are able
to access to that a security footage and they do store it and they are
basically looking for people they need to find. So this isn’t unheard of. This is a more extreme example but it isn’t unheard of.

Lindsey: I think a lot
of whether or not there is extreme concern with this practice is where the
images are coming from. If
the images are coming from the open web, well those images are out there. You put an image of yourself on
the internet it is pretty likely that somebody is
going to look at it. That
is the risk we take when we publish selfies. The question is if the NSA were intercepting these and
pulling them off your phone and they were private images that is a complete different situation. But so far I haven’t seen that
come up.

Mike: Well the revelations started with, one of the
first or second ones, was about Prism. That
the NSA was finding ways to tap the internet connections coming from the likes
of Google or Facebook servers or data centers and
that stuff all has pictures in it. If you look at Facebook alone I don’t know how many
pictures are uploaded to Facebook daily but it is an astonishing high number. And if they’re getting the data, that data includes
pictures. I think it is
kind of obvious, in retrospect, they are not just going to skim off the text. You might think they would simply because of the scale of
this thing. But they are
not worried about scale. There
is an interesting controversy in Utah with the NSA’s Bluffdale, UT data center which is supposed to just
massive. And the scandal is
that there are people that are political actors within Utah State politics that
are opposing this kind of mass surveillance and they want to shut down the NSA
by cutting off their water. A
data center like that needs massive amounts of water
for cooling and so there has been a political fight within Utah to shut off the
NSA’s water. They are
probably going to fail but that is one of the interesting things about this
whole scenario is that a national organization like
the NSA has to exist in a state or in Washington DC. And so essentially they need resources from state
governments and that is an interesting way to sort of put the brakes on NSA. We’ll see if it goes anywhere. But this whole story of the NSA collecting images is the outrage Dejour and Harry McCracken was on Tech News Today and I think we talked about
the book No Place To Hide, which I think I had just started it when we were talking. I’ve recently finished it and
that is a fascinating book. That was really an incredible book because he not
only goes and details these sort of story about how he was contacted by Edward
Snowden and he kind of blew him off as a hack for many months because Snowden
wanted him to install encryption, the whole hotel
room thing when they did the video and all that stuff. Glen Greenwald was the person sitting there
interviewing him. Then
there is the whole chase, cop and robber chase thing, and then in the end he
gives the most fascinating parts of the psychological
surveillance on the public. Which is that if you know you are being watched, you change
your behavior. That is the thing about the argument in favor of the NSA is
that if you have nothing to hide, it is okay. Don’t worry about it. But the fact that we know now
they are surveilling us makes people stick to what they call social norms of behavior instead
of experimenting and trying things, etc.. It is a fascinating book.

Harry: Did you come
out of it liking Glen Greenwald more? I find him a little… I admire him
in some ways but I also find him to be somewhat grating because he spends so
much time complaining about anybody and everybody that doesn’t agree with him
on everything. And I have
not read the book partially because I’m a little intimidated about spending so much time with Glen Greenwald.

Mike: I guess his
personality in general is why Edward Snowden picked him. He is a bit of a bull dog as you guessed.

Harry: When Time did
not name Edward Snowden as Person Of
The Year, Glen Greenwald was appalled and said so. We named the Pope and there was also a case for.

Mike: The Pope is
an unusual character as well. Just like Glen Greenwald and Edward Snowden. You know Glen Greenwald, as an Editorialist yourself, I think you would come out with a similar viewpoint as I did that he makes a lot of good points and it is
definitely worth reading. He
makes some faulty points as well. He’s got some bad reasoning in there. For example he’s been in debates
with people who say, “Oh surveillance is not that big of a deal” so he challenges them with, “Okay why don’t you tell us
your phone number and your credit card number and all that kind of stuff”. That is a bad argument, just
from an argumentation stand point because there is a difference between the revelation of data that will have a 100% chance of being
exploited in a negative way. Which is when a person who is in favor of the NSA publicly gives their
information and the NSA when they are harvesting things, chances are nothing that outrageous is going to happen. That is apple and oranges. That
is a bad argument. But the
rest of it is so interesting. And I just think it is worth reading, even if it is a flawed account. It is the best thing we’ve got
and there are few books that have that many revelations. That much information
about how the whole thing works. I have to admit I came out with more respect for Edward
Snowden, about whom I’ve been on the fence. And I thought he was kind of a shameless whatever but at
the end of this book I thought he’s, I guess the way to put it is he’s a more laudable person than I thought. What he is doing is braver than
I thought it was and a little bit more selfless thanI thought it was so I came out with a better view of him, probably
identical view of Glen Greenwald, who I like. I mean, you know, that is the
whole point. You have
somebody with strong opinions and you can oppose them with opinions of your own
and he will attack you in social media. So it is all fair. Well, speaking of the world of cloak and dagger, True
Crypt, had a weird termination this week. Essentially what happened is
that TrueCrypt is one of the tools that Edward Snowden personally recommended that
Journalists and other people use to escape the clutches of the NSA. And in fact it is one of the
ones he wanted Glen Greenwald to use before they had
contact, but all of a sudden they went to the true TrueCrypt and you got a re-direct to a page that basically said, “TrueCrypt is not really that secure you should use Microsoft product and never
mind we are going to go away”. Goodbye. This is a weird thing. Everybody thought they were hacked. But it turns out that it may not have been. You know this is just one of the
most bizarre things I’ve ever read but one of the things that I wonder about
is, does this make open source projects look bad? I mean especially after Heartbleed?

Lindsey: I think Heartbleed did that.

Mike:Heartbleed did that and now this is doing that. It turns out that I don’t think they got a lot of
attention. It was a tool
people used or didn’t use, they either knew about it
or they didn’t and now we know all about it and the developers were anonymous. We don’t even know what country
they are in, we don’t know if there is one of them or a hundred. We don’t know if they work for
the Chinese government. We
don’t know anything about them.

Lindsey: We don’t know
what their motivations were for maintaining it. Let’s say this is just as simple as they found a flaw that
was so big they do this in their spare time, there is no way they could tackle
it in a responsible way and they just walked away. Even if it is that simple, well
there is no safety net there. And there is no accountability at all.

Harry: On the other
hand, if a program does have flaws I want to know about them and I’m far more
likely to know about them if it is open source.

Mike: That is true.

Harry: And that is
the good and bad of open source.

Mike: There is a
group of people who are security researchers who want to continue TrueCrypt. Right now they are
trying to see if they can get the rights to do that. As I understand it. If they do, they can sort of do
a fork of TrueCrypt and bring it forward and have something like this continue. But it really raises the point
that there is not a lot of choice in this kind of encryption. There really should be a lot more offerings out there that people can choose from. We talked to Steve Gibson, who
is the Co-Host of Security Now and has been in the industry for a long time and
he said he started to write something like TrueCrypt to do something exactly like that. But he stopped because TrueCrypt was so good he didn’t think it was necessary. He is now threatening to bring that off the shelf and keep
developing it.

Lindsey: Maybe that is
another challenge of open source is that unless an open source project is adopted by a company that is aiming to really make a profit, there is not much
incentive for competition. And so it is hard to get redundancy built into an
ecosystem if there is just
one open source product that takes care of everything.

Mike: Exactly.

Katie: I think that chat room is going nuts
right now with TrueCrypt conspiracy theories. But that is obviously a topic people are very
interested in. I think a
couple of things have come up just in some reporting about this. That people
are very curious about the fact that an audit had
been conducted. Or was in the works
for a few months, before this whole thing shut down. People are wondering if this had anything to
do with it. Prof. Greene, who is doing that audit, obviously had very good
intentions for it. But people wonder what is
happening there. And then also I did speak with a couple of folks in security
industry including Dan Kaminsky and I think a lot of people know who Dan is. He, in 2008 discovered a
really big vulnerability in the DNS protocol. He has
spoken a lot after heart bleed, and of course he has is own company that is doing white hat security stuff. He said he had a
completely crazy and baseless theory to all of crypt. But that the software had
to have been developed by somebody related to government
and he really does believe that they put a stop to it. That people figured out
it was a government organization, Or that they had worked on this. They wanted to be anonymous the entire time, they never wanted to give the project over to anybody else. Which often
happens in open source things. Look at BitCoin. The people who started it were anonymous but he eventually it was taken
over by people who weren’t anonymous. It is maintained. And that never
happened. And then sort of the weird references to
Microsoft in the notice when it was taken down. I just thought I would throw
that out for all the folks watching right now who are really interested in
trying to figure out why this happened. Why it was taken down.

Mike: And you mentioned to weird references to Microsoft. One of those weird references was that
they associated the termination of this project to this that that Microsoft was
not going to continue to keep XP going. And that is weird. Because it has nothing to do with XP at all. And it is also weird because, we had a lot of
conspiracy theories in the chat room and we talked about this on tech news
today, because the Chinese Government essentially banned Windows 8 for government use. Using the same
reason, that XP was no longer being supported and
therefore don’t use Windows 8. Which, I guess the idea was that in 15 years
they won't support Windows 8 and we will all be using Windows 8 by then. Totally bizarre reason to do anything. And the other one was that the termination note explicitly recommended that everyone move to Microsoft, and I forgot what
the name of it is. But Microsoft’s
encryption.

Harry: It is
BitLocker?

Mike: BitLocker. And we talked to Steve Gibson about that. And
Steve said, no that is not really the best choice. At all. And it is controversial.

Katie: Nobody in this world would ever use
BitLocker. It is not on our
radar.

Mike: Totally random and you expect better
from the makers of TrueCrypt to make a better recommendation. There are much better things out there
to use. One of the things about all these NSA spying
revelations is that you think well this is just the NSA’s going nuts. They have unlimited resources,
they are doing all these things. But another view is that they are just a
leading indicator. That the application of big data
principles to the collection of internet based stuff is kind of a no brainer if
you are an Intelligence Agency. The NSA is just doing what every national
government would want to do. It turns out that in Germany the German report saying that the German version of the NSA wants to do something similar to
what the NSA is doing. To
do mass surveillance and they have actually requested 400 million dollars. But they want to do something
similar and of course we have seen the allies of the United States, Britain, Canada, New Zealand and the English speaking
Australia eventually were all working on concert on a lot of this espionage
stuff but I think we are moving into a world where pretty much what the NSA is
doing is a version of what everybody wants to do and
will do simply because their job is intelligence. If it the data is there, why not harvest it and store it?

Lindsey: Well certainly. I think if you are in the Intelligence community and I’m
not making excuses for this but if that is your job is to find all the information, you’re going to do whatever you
can to achieve that. And
maybe get a little too far away from the big questions about why we are doing
it and whether it is the right thing to do. But you had better bet that China is, I am sure, doing this. I would be shocked if they weren’t. In fact I think there were quite a few people out there
when the NSA revelations came out who… and I’m not sure this is a good thing, but the reactions were “Are you
surprised that the government is looking at your
data?” Didn’t we all think
that was happening anyway? So,
I don’t know. I think it is
not too surprising to hear that other countries are trying to do the same
thing.

Mike: Absolutely. And of course the other thing
that is interesting about this from a political
science perspective is that this is kind of giving espionage a bad name. What is wrong with espionage? We want our government to have
information. Let’s take an
extreme case like North Korea. You have two choices. You can have espionage and learn
things about what they are doing with their missiles and their rockets and
their nuke program and their labor camps and all that stuff or you can
voluntarily choose to have no idea what they are doing. Those are really the options and so we have
espionage to spy on other countries, to find out what
they are doing and of course this whole wire-tapping communications thing goes
way back. In the cold war
the US used to send submarines down in the ocean and clamp these devices onto
their underwater cables and we would listen to phone
calls within Russia. This
was in the 50’s, 60’s and 70’s that the United States used to do this. they used to wiretap telegrams. The telegraph system, and it turns out that
the United States had this special, the NSA in fact had a relationship with all the major telegraph companies to hand over data.
It is just like today. And so this kind of thing has been going on for a long
time. The problem with the NSA spying is that it, in my opinion, clearly
unconstitutional to harvest the data of people before
they have been suspected or charged with a crime. This is a violation of the
fourth amendment.

Lindsay: And history tells us that when we start to serve veil our
own people, especially people who are presumed innocent, that information gets misused over time. It just does. The nature of power
is to find a reason to use those for unintended purposes.

Harry: And today they can do it upscale. Like
spying on one telegraph probably not that huge a deal. With the Internet it is
just about as easy to spy on everybody as it is to
spy on one person. So by definition people deserve their privacy and that was
not true in the old days.

Katie: I think that
this, first of all when I read this story I was really actually shocked that
Germany was so far behind. Because I think it has
been well documented that China, Iran, Israel they are all doing with the NSA
is doing. And more. Some would say that China is doing more. I think that all of these conversations have been really
important. I think this note and has been very important. I talked to a lot of people that work in security
all the time, folks from places like Palo Alton and security researchers and
hackers and they really do believe that this is a conversation that had to
come. Around the NSA, but that nobody wanted to be
the person to force a conversation. And the debate is going to change. This
debate that we have with all these ongoing revelations and more news coming up
and news stories and countries like Germany saying we need to do these things to, you are finally seeing the security industry
change and start to acknowledge and take into account our constitutional
rights. Which hadn’t happened since
9/11. After the terrorist attacks it changed
the conversation and now we are going to see the pendulum swing back again.

Mike: One of the things that, again espionage
in general can be a very, very good thing. And I think clearly with the NSA the problem is a lack of
oversight. One of the
shocking things we’ve learned from the Snowden revelations is that any list within the NSA can certainly call
up an application and search everything. Like searching Google. It may be email, maybe they suspect their
girlfriend is doing something so they can just call it up and find out
everything there is to know about this person. They absolutely can do that and
there is no checks on that. There is no
external oversight and there is not a lot of internal oversight within the NSA. So it is a really fascinating
thing that we are all going to have to deal with and
of course they raise the question are non-Americans protected by the
constitution. Is it okay to
spy on people as long as they are not American citizens? I think the world has been shocked by the
conversation we are having in the US. “It’s constitutional, it’s okay to do it for Germans. You can spy on Germans, just don’t spy on me”. So that is kind of interesting
development. So it is
really a fascinating thing and I hope these revelations keep coming because we
really want to know a lot more about what is
happening. It is a great
data story as well. The
scale at which thing is happening is just absolutely astonishing. So, we’ll keep an eye on that. We’re going to talk about what
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Mike: Well,
Microsoft is doing some interesting things, including possibly, maybe, kind of,
a smart watch. This was an
exclusive by Parmy Olson over at forbes.com and she says that Microsoft is working on a
smart watch. Not surprising
that they are working on a smart watch. Microsoft is a company that might want to do that sort of
thing. But what was
surprising was that her sources say that they could have something on the
market by the end of the summer. I would be shocked if they did
that. But does the world
really want a Windows Phone like smart watch?

Lindsey: Well the reality is that I’m not sure the
world really wants any smart watches yet. We saw that little spoof video a little while ago and I think that something will happen, somebody
will invent an aspect to smart watches that will make them something you really
feel like you need to own but so far I haven’t seen that. that special feature quite yet. In fact, we’ve been doing some
interesting tests on heart rate monitors and even the heart rate functionality
on most these devices doesn’t really work. I mean, it works. But under very certain circumstances that you have to be
holding perfectly stock still. And even then they are not as accurate as an EKG or a test based heart band. It is so young is what I am
saying. It is so early.

Mike: So if you
die, it is very accurate. It
will say, Dead. Because
you are holding still right?

Lindsey: Yes, you have
to be holding still. It
would say zero which is accurate.

Mike: I’ve been
kind of stunned. We keep
hearing about this revolution in bio-metrics. Everything is either a heart monitor or a pedometer. It is like enough already. My watch, my
phone.

Katie: What else are
you going to do? Unless you are going to work with the FDA which none of these
companies want to do, you can’t make any real medical claims. It is like they are the weight
watchers of apps or something. If they make promises, they have to keep them. So it comes down to heart rate, calories, pedometer. Until somebody
actually works with the FDA to do something that really does something that is
a medical device that will make recommendation about your health that could
hurt or help you then you are just going to see these gimmicky things.

Lindsey: And working
with the FDA is an incredibly laborious, complicated process for very good
reason. And I know this
because this is really personal, but I have an insulin pump and a continuous
blood glucose monitor that goes under my skin and
feeds data about my blood sugar to this pump because I am Type 1 Diabetic. That technology is so not
something that you would want on your wrist. It is incredibly complicated. Just the layers
of tape and special kinds of adhesives that it takes to do that kind of thing is just very complicated. I think it is going to be a really long time until we get devices that
are sort of both medically accurate and useful and things that you want to go
over to Target and buy. And
put on your body. It is a
really complicated set of problems so I think that
whatever we get in a smart watch is not… well, there may be some health aspects
like the pedometer where a
severe activity… but there has to be something that is really not health
related that is the killer feature. We haven’t quite seen yet.

Harry: I went to the
Samsung event last week for their SIM band which is yet another Samsung
wearable device. They are
really quite different than the Galaxy Gear stuff because SIM band is, in
theory, this open platform for a really futuristic
wearable device. In fact
they want companies to invent new kinds of sensors. I think they talked about glucose monitoring as a specific
example. They want people
to invent the technology that works for that and so it is really intriguing. I never thought of Samsung as
the kind of company that would lead an open hardware platform. But at least they are giving it
a try and they conveniently announced it a few days before WWDC, which I’m sure
was intentional.

Lindsey: It sure was. And Samsung has a medical device business right? Samsung is such a huge
conglomerate in Korea they’ve got their fingers in everything. I think they even make ships. So they do have an entire
business against creating medical technology that I think they are going to try marry some of that with their consumer division.

Mike: The press
photos of the prototype band that they showed had 30 sensors on it. It was ridiculous. It had so many things in it. What are they sensing there?

Harry: The first one
they are shipping to developers later this year does
not look all that exciting and it is not radically different. The idea is that it is a
starting point for new technologies. One cool thing about it is they wanted to create a wearable
device that you can actually wear 24/7, which
generally speaking you can’t because of battery issues. They have like this little shuttle battery
where you charge your battery and you snap it on your SIM band so you don’t have to take
your SIM band off.

Mike: That sounds
like a cool innovation. They
also announce the cloud service called Sammy. And I understand that is going to support non-Samsung
devices. Is that correct?

Harry: That is also in theory. An open platform. According to Samsung, the great thing about
Sammy is that the consumer controls all the data. And there aren’t any privacy
issues because if it part of Sammy it’s not going to be anything that they will
try to monetize.

Mike: I’ve been
stunned by the amount of attention that an association of medical and health
related things have been circulating around the smart
watch category. Apple, of
course, is hiring all these medical experts. They’ve been seen on the campus and been hired and I just
don’t understand the attraction to that. It is just, like you say Lindsey, it doesn’t seem like that is the killer app. The real killer app for smart watches is going to be
frankly branding and design.

Lindsey: I totally
agree. I think they have to
look beautiful and I actually think that the killer feature with the watch is
sort of like the Google Cards experience. Which we are
going to see later in June at Google IL and I think we are going to see that on
some devices. I think that Google really shines in their
predictabilities. Like, we
know you have an airline ticket sitting in your inbox and you’re watch is just going to flash up and say, “You need to leave the
house in five minutes to catch your flight”. I think that passive interaction is where it is really
going to shine. Or some
really sophisticated voice recognition. But even that would have to be at
an arm’s length to be really effective. So that it could just pick up on what you were saying, which is also creepy.

Mike: In fact a
Google executive posted some screen shots of Android Wear that showed a number things including a podcasting app and a game. That was interesting. There was an unauthorized leak
of a video showing an LG device playing Android Wear type stuff and then that
was yanked down by LG. That
appeared on YouTube and then was taken down. But it looks pretty much like what you would expect. I do
really thing that, I agree with you completely, it is a combination of really
good notifications and great design.

Katie: There is one
more point on why these hardware companies are all going after the health space
and is completely counter intuitive and doesn’t make
a lot of sense but there is more data point that you might want. We might want to all bear in
mind that 1.9 billion dollars in VC money went into digital health. Mostly apps
software. That is double from 2011. It is set to grow say a lot of the venture capitalists about what they are
investing in, especially the ones who have raised the billion dollar of funds in the last two years. There was a story about where are you going to put all this
money? Digital health came
up again and again. So I think some of these companies; Samsung, Apple, they
don’t know where it is going to go they just know there is going to be a lot
happening there in terms of apps and other devices around digital health as
people try to figure this out. So to be able to be the platform for this
space that is just receiving tons of money, double from 2011, there is almost 2
billion dollars now. And in
2015 you’ll be able to expect some more growth rates, it is not a terrible place to be when you look at it from that perspective.

Lindsey: Well, as a
part of that a health care industry I think you are absolutely right. If we got to a point, and I
think it will take quite a while, but if you can get a prescription
for one underwritten by insurance and they are part
of the health care establishment. That is a great place to be, there is a ton of money there.

Mike: Absolutely.

Katie: Yeah. And there a few companies out
there doing stuff like that. Not very many. Proteus is probably the one that is the
furthest ahead.

Mike: Medical
industrial complex that is a great source of revenue and it is insurable. Maybe we can get a watch that is
covered and paid for by our health plans. Obama Care. We can do it. The website works. Well, Microsoft was not only potentially working on a smart watch they also showed off this week a sort of, I
guess a universal translator. Star Trek style. It does instant translation via Skype. So you can have a Skype call
with somebody and you can speak English and the person on the other end can hear what you said in German and also read it on the
screen and then they speak German to you and you hear in English what they
said. It is kind of a no
brainer. It seems like
something Google would do as well. But this is fantastic technology making the world a better place, unless there is something about
it that I missed.

Lindsey: I watched the
demo and of all of this conversation about wearables this is the thing that got me the most excited this week. I’ve found it just amazing. And even, I’m sure there is a long way to go and this is one demo with this
German in English and I thought it was funny picked German?

Mike: They’ve
previously demonstrated in Mandarin or standard Chinese translation and I think
a year or two ago there was a famous demo of that.

Lindsey: But I found
it incredibly compelling because this is a real challenge. I’ve heard people in the
software development industry who worked really closely with companies and
India recently and have been pulling back partially because of communication issues, mostly to do with time zones. But if you can imagine the
ability to work just seamlessly across languages that is a huge economic
opportunity and it is also fascinating.

Mike: It truly is. My wife and I were recently
living in Italy. We spent some weeks living in Florence, Italy and I was
carrying about what is called WordLands, it is an app that…

Lindsey: Translates an
image?

Mike: Exactly. I had Google Glass and I was
saying why don’t they have this for Google glass this would be so great? And
so you hold this thing up to a sign or a menu or something that is written in
some foreign langue and it would show you in English, the same type face and
colors and everything. It
felt really magical. Truly amazing. This is the world we are going to. That
sort of thing will be in your smart glasses and tourists will be able to walk
around and no matter what country you are in everything will be in English for
you. That is going to be
standard. We are on the
brink of that world. And
then when you talk you are going to hear in your hear
the language when people talk to you, you will hear it in English. It is really going to make the
world a smaller place. I’ve
already taken advantage of the translation feature in Google Plus and you just
click a button and boom you see English. It is just, I agree with you. This is a great new world we are
going to be living in.

Katie: I like it. A real like
Babble Fish. It is like the answer really is 42.

Mike: That is
exactly right. People talk about wearables being invasive and annoying, and it is true,
but things like smart glasses can really enable you to break down language
barriers.

Lindsey: on the other
hand, I guess to play the devil’s advocate on my own excitement, I love other
languages. I don’t speak any of them very well but I
love learning them. I feel the same sadness when I think about a future in
which I don’t need to learn another language. The same way I feel about a
future in which I don’t need to drive. There is joy in driving, there is joy in learning another language. On
a human level I worry about losing that. I feel like languages the fabric of
your society. It is closely linked to your culture.

Mike: But if you really want to get
depressed, you really want to go down this rathole, a foreign language is knowledge. What do we need knowledge for? Why
learn knowledge, why learn facts, if any fact can be conjured up instantly 24
seven.

Lindsay: Somebody has got to put it on
the Internet.

Harry: This could be a long long time Before a computer can speak and translate between languages as well as a human. It is like a lot
of other technologies, the first 80% is relatively easy the last 20% really
does make it magical, that is the hard part. You do get there sometimes, I feel like voice
recognition almost got there. After many years. It was amazing but not quite amazing enough to be practical. It actually
isn’t. But, translation is nowhere near that.

Mike: It raises a serious issue for
education. What do you teach kids? Do you teach them a foreign language now? You teach them to do cursive writing. You teach
kids to be able to function without a smart phone that is connected to the
Internet.

Lindsay: The cursive writing question is
very interesting. I think, lately, I have a fifth grader who is going to be in sixth grade, he did learn cursive and his school
district does teach it. Part of the motivation for cursive, a lot of schools have not been
teaching it anymore, is for kids who have dyslexia or any sort of trouble
writing or interpreting, cursive helps. It actually
forces the two sides with a brain to talk to each other. And they can spell
better in cursive. It I’ve seen this in my own child. It is very interesting.
So there are some skills that I think we don't know what they have until we
stop doing them. And then we realize we lost
something there. And maybe we should bring it back a little bit.

Mike: I think we have already lost so much.
It used to be, 200 years ago, kids would need to know how to milk a cow. They
would need to know how to do all these things which
kids now days have trouble even recognizing what a cow with. And so…

Lindsey: Not in Petaluma!

Mike: Not in Petaluma. But, this is the
trajectory that we are on. And it is accelerating with digital technology. In
the education market we have to decide what we are
going to teach kids.

Lindsay: I also have, and I find this
fascinating, but because of voice recognition and because it has become so
sophisticated there is a possible future in which we don’t need to write. At all. We speak. And maybe you can go in and edit,
but you are wearing a smart glass, you are wearing some sort of receiver, you
simply speak what is you want to communicate and it comes out what you can
read. Everybody will need to read. But I think there is a possibility that we won’t get to the point where cursive or print doesn’t
even matter.

Mike: Yes.

Harry: Even today there are people that are
dictating entire books.

Katie: I was talking to somebody who dictates
all of his emails, and all of his correspondence, even a lot of his memos to his staff. He said that because of where
the technology is he actually has to speak like a robot for it to work. So he
couldn’t have this sort of conversation that we are having with actual
inflection. He actually has to sound robot. He does
it for four hours a day. And when he comes out it is confusing for his staff
because they don’t know what has happened to him. There were definitely people
that worked for him and
didn’t know him well, who would only see him after these moments and would think that he had some very severe form of autism. It is
weird how the technology is changing our personalities. It is bizarre.

Mike: It is bizarre. I have tried to use, I
don’t know if you have tried this Harry but I have tried to dictate columns and
things like that. It is great at first and then you
just get tired of it. It alters your thinking process.

Harry: It is just different. Actually even
before voice recognition and people would dictate books on tape and have them transcribed, I read a fair number of books
that weren’t all that great that were dictated. But when you write, you polish
anything carefully. For most people that is harder to do.

Mike: Absolutely. Well, speaking of books we
are going to talk in just a second about Amazon’s war against one major publisher. The first, Chad, don’t we have a
look at what happened here in the brick house for this week? Here is what
happened here on Twit. That’s
outrageous. I did not say
that. It has been digitally
inserted!! I am going to
lose my job! Talking about the future of books, Amazon had a weird glitch
Hachette books if you went to preorder some Hachette books you couldn’t. Turns out, that Amazon had been
the go skating with hash at Oprah’s something that has shat was publishing.
And, a lot of people cried foul saying you are using
your monopoly to sort of like crash these publishers, bending them to your
will. And this is outrageous. They came out with a rare statement saying, no
luck, we are here to negotiate on behalf of the customers who want the lowest possible prices and we don’t know if we are going
to be offering these books in the future because that negotiations are going so
well, so why should we take preorders if we might not be selling these books?
We may be terminating our relationship with Hachette. They may have to go to the other
Amazon. Wherever that is. So where do you fall on this? Is this a case
of a monopoly sort of dominating and industry and making everybody do things
their way? Or is this just a reasonable negotiation and the effect of that negotiation reflected in the catalog itself?

Lindsey: Well, I don’t know if I can say whether
or not it is reasonable because he would have to be there to know what the
actual argument is about. But what we do know, is that this is been going on for some months. I think it was the New York Times
that pointed out that most of these negotiations happened within a month. This
has been taking a while. I think this, at the very least, shows how important
Amazon has become. It would make logical sense if
they take down the preorder button if they think their negotiations may fall
through. But I think the entire world cries foul because as they know the
negotiations are going to fall through. What would Hachette do if they didn’t have Amazon?
In that question right there is why people got so
upset.

Mike: How do you function as Hachette without Amazon?

Harry: The part I find fascinating is not the
negotiations between Amazon and Hachette, because they are both big companies and this stuff happens
all the time. It is the fact that Amazon has always
called itself Earth’s most customer centric company. For the most part it is in
the level of customer service they offer is kind of astonishing. But they have
acknowledged that not only are they not taking preorders,
but they are keeping fewer copies on hand. They are intentionally delaying
shipments in some cases and essentially customers are getting caught in the
crossfire. Of course every company makes decisions and they do things not being
as perfect for the customers as they might be, but
Amazon has such a history of doing things that seem crazy in order to make life
better for their customers. So
to sort of have the curtain peeled back and willingly not letting people get
the books they want because of this. It is kind of
shocking in a way that would not have been if it had been Walden books or
whoever.

Mike: They remind me a bit, Katie, at
Walmart. Which is that yes people
want lower prices, they want people of certain way and so we, Walmart, are
going to use our gigantic power in the industry to
force everything to happen our way. We are going to change the way people package their products. We are
going to change the way they ship them, and we are definitely going to lower
the price. Having everybody by everything from
Walmart is good for customers. Is Amazon that in a nutshell? I’m sure you’ve
heard about the diapers.com scenario where Amazon has this algorithm that automatically changes
prices based on what the competitors prices are. And they undercut diapers.com consistently over a sustained period of time to the point where the
valuation of diapers.com crashed. And they bought it at a lower price and
now they own diapers.com. Is that good for customers? What you think Katie? Is Amazon a force for
good or evil?

Katie: I don’t know if they are a force for
good or evil but I think
Amazon being good for customers is kind of a nice
whitewash or veil for Amazon to be good for Amazon. And I think the diapers.com example is great. I think that your Walmart analogy is very interesting
because Walmart is a very, very low marking business. They have to do volume because they do not have margins. Amazon, as we
know, if you look at their
annual report portrait they put out this is not a moneymaking company. So it
was very fascinating in the New York Times when they had an editorial around
this issue. Saying that they thought it was
interesting that this battle happened at a time when Wall Street investors were
finally starting to get a little bit restless with Amazon about not being able
to produce profits despite
all these following businesses and everything that it
does. In that statement, from Amazon, essentially what the company said is that
we are playing the long game here. We need to deal with publishers like
Hachette in a way that is
going to be good for customers. But,
at the end of the day, good for Amazon. And the New York Times said that maybe Amazon realized they needed to
start building margins somewhere. Because you can’t just run 50 low-margin
different businesses unless you can do Walmart type volume and all of them. Which, they don't quite yet.

Mike: Their low margin approach to business
is yet another questionable thing. It sounds, if you look at it from a certain
perspective, as an anti-competitive thing. For example, Amazon famously sells
books at below the cost that they paid for them. They
essentially say we think this book is going to be a $9.99 book but they
negotiate a price that is higher than that from the publisher but they will
still sell it at $9.99. This is what the Apple got into trouble when they
colluded with other publishers to keep margins high
so that publishers could actually make money and so on. It turns out that that
was illegal and what they called dumping. If you do it internationally it is dumping. If you sell
something below cost in another country that is against the international rules of trade. But if you do it domestically it is
okay. And Amazon does that. They also did that with some of their tablets. Where reportedly they were selling
tablets at lower cost than it took them to make them. It is really hard to
get your brain around whether Amazon should have a more profitable business,
whether as they should be kinder or gentler, it is almost impossible to imagine
them that way. I think one of the reasons why they have come into a lot of
criticism lately is Alibaba is in the news. Alibaba is sort of a Chinese Amazon in a way. Not really, because they do have very different models, but
they essentially dominate the Chinese buying things online scene. In a similar
way that Amazon does within the United States. And Alibaba is massively profitable. They make a lot of
money. They have rock-bottom prices on some of their categories, some of their
stories. They have different types of stores. But 40% of their revenue is
profit or something. It is very, very high. I don’t
know, I doubt would Jeff be results in charge they are ever going to soften.

Lindsay: I don't think so. He has said
over and over again that they are there for the long haul. That all the
decisions he makes are so that they can build the business they want to build for 15 or 20 years from now. Which is very interesting. You would almost expect them to be softer with that approach. But they
seem to be extremely rigid and automatic. I don’t think we will know for 10
years if they are being good or evil.

Harry: Just talking about books specifically,
I would be happier if there was someone that seemed like a true archival Amazon
in that category. Barnes & Noble is not an arch rival. They are in somewhat difficult
shape. Despite Apple getting into in trouble there
bookstore is not an arch rival. The day will come when Amazon has an arch rival
because it always happens. But right now is a little hard to see that happen
because they are so powerful.

Lindsay: Were there will be an antitrust
investigation. That really could happen. When you
think about it, Amazon has if they get up to 70% market share, and they
basically have the entire self-publishing market which is of their own design
really. That is not necessarily a negative thing, it is a positive thing in some ways. But that
is a huge…

Mike: From an antitrust perspective though
they are squeezing the publishers on one end and they are competing directly
with them with an entirely different model on the other end. It is not easy to
be a publisher.

Harry: There was a small publisher or two who
has come out in favor of Amazon and there are stories about small publishers
reaching way more people and doing very well because of Amazon. So, I certainly
don’t think they are an ogre who is only bad for the publishing business. In some ways they have been wonderful for
publishing.

Mike: I think we can all agree on this, which
is that Jeff Bazos is a genius. That Amazon is incredibly disciplined company. And that is
the source of their success in a very brutal market.
As far as I’m concerned if they deliver diapers be a drone all is forgiven. That is all I want. Is that too much to ask? In
a second we are going to talk about another company with a bad reputation,
Comcast.

Mike: The first and want to tell you about Carbonite, A company that has saved my personal bacon many, many times. Carbonite is
an automatic backup solution that backs everything up in the cloud and you
really don’t have to do anything. That is one of the really cool things about
Carbonite. They were the first backup company that
just took all of the necessity of having any sort of technical acumen or
basically for site about backing up your files, and adjusted automatically. I
first started using this back when I was a Windows user. On the Windows version you just installed it and it figured out which files
you pre-much want to backup. It puts a little circle next to every single file
in your entire system, that tells you whether we are not ever going to back
this up, we are going to
back this up but haven’t, we have already backed this
up so don’t worry about this file. It is so reassuring. Unfortunately that
little user interface doesn’t exist in the Mac version. But essentially it is still that
easy. You simply install it, and the default mode is that everything is backed up in the cloud. And when a meteor shower
destroys your house and breaks your laptop into multiple pieces, you haven’t
lost any data so you don’t have to worry. And so, carbonate is really a
fantastic service that I’ve been using for many many years. It backs up all your computers, and not only that , your servers,
your external hard drive into the cloud. It is probably a good idea to have a
local copy as well, a little hard drive. Because sometimes you may not have any Internet
connection and you need a file or whatever so it is
good to have redundancy. But you definitely need that cloud-based backup. Because you don’t want all your stuff
together. There is the famous story of the film producer of Apocalypse now,
Francis Coppola, was in Argentina and he had his
screenplay and all of his personal photographs on a laptop and he was backing
them up to a hard drive right next to the laptop. The laptop was stolen and the
hard drive was stolen and he lost everything. He lost his screenplay, he lost
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Mike: Well, let’s
talk about Comcast. Because Comcast is getting a lot of bad press lately. They
have been embroiled in all this controversy around
net neutrality and making matters worse the CEO of Comcast, Brian Roberts,
recently came out and said we are going to tell you why everybody hates
Comcast. The reason why everybody hates Comcast is that when the people that originate the Comcast, the data, the sort of Netflix of the world, the YouTube’s.
When they raise their prices everybody blames us. We are just trying to provide
a good service. And therefore, we think we are like the post office. If you
want to ship a package through the post office you’ve
got to pay the post office. And he is saying that companies that generate a lot
of data, like Netflix, should be paying them and paying them quite a bit for
the data. Even though the customers
are also paying for the delivery of that data.Any thoughts? Does he have a good point here?

Lindsey: Well, I mean the reason that came off
as so silly is that I don’t think that is the reason people hate Comcast at
all. They hate it because they don’t like dealing with the customer service when they call because there’s a problem with
their server. It takes forever, you are stuck at home and all kinds of
reasons. I can that is the last of them.

Katie: Yes. Exactly.

Mike: Do you hate Comcast, Katie?

Katie: Yes. Nobody cares about what is happening with Netflix in terms of whether we like the
company. It is exactly that. They are horrible to their customers. They have
very bad customer service. But in terms of what Roberts is saying too it almost feels like he kind of
wants to have it all his way. We are just the pipe
and so you just pay the pipe. But he also wants to be able to control the pipeline, and He wants to not be a dumb pipe,
and he wants to be more than just the interchange, and he wants to preserve as
gatekeeper role too. I don’t really think he can have
it all.

Harry: And he owns a lot of content. He is not
a dumb pipe he is a dumb pipe that owns NBC and does all kinds of stuff. And makes
movies.

Mike: I personally
with love to live in a world where the pipes were as dumb as they could possibly be, just really fast. I would love to
get content from a company. Google Fiber, which is only in two towns right now
and they are looking at more, is probably as fast as it gets in the United
States for the delivery of content. That Google is
not a disinterested party. They want you to get their ads as fast as you can
possibly get them.

Lindsay: They want you to get YouTube.

Mike: YouTube is the second business
generator of data after Netflix in the United States. And, yeah, absolutely. There’s got to be some way other than just
having these things become common carriers, we could just have the dumbest
pipes that have no interest other than to provide the fastest possible data
service.

Harry: Sadly there is no such thing as a
disinterested large company.

Mike: I guess I am just a dreamer.

Lindsay: Well, it could be government
regulated but there are a lot of people who wouldn’t want that either.
Australia tried to do that and that fell apart. There are some countries, a few
of them, South Korea, that really that is the
alternative.

Mike: Absolutely.

Katie: It raises the question. Has the
Internet risen to the level of importance that it is the utility and it should
be treated like a utility. If that is the case, then that is very different. But until that happens, we are stuck with Brian Roberts.

Mike: Well, we shouldn’t be. The real
problem, the root problem, whenever we talk about net neutrality, whenever we
talk about whether we hate Comcast are not, is that there is often not much of
an alternative. As there are in other countries. When you go to the UK you can choose among four, five, six or seven
different ISPs. And, let the best ISP win. And we don’t have that here. In some
markets it is just one, in others it is just too. It is very rarely ever three or four. And that is the biggest problem, we need to figure out how to get some competition in this market. I
think we can all agree with that. Well, that is today’s twit. The Leo-less version. Before we sign off, I want to invite everyone
to tune in to our special coverage tomorrow of WWDC, the developers conference keynote. That is going
to be Leo Laporte, he is in the basement tied up right
now. We are going to untie him for that. Sarah Lane, Alex Lindsay and me are going to cover it live and heckled the keynote and see what it is they
announced tomorrow. So tune in for that. Tech news today which is normally at
10 o’clock will be at 8:30 AM Pacific. So Harry McCracken I want to thank you
for coming to twit today. It is always a pleasure to
have you on whatever show I happen to be hosting.

Harry: Always good to see you, Mike.

Mike: So tell us more about where people can
read your stuff, with your new joint.

Harry: Come to technologizer.com and you will
see all my stuff. I’m also
@harrymccracken on twitter. I’m also doing technologizer on Flip Board, my technologizer magazine there which will have all my stuff.

Mike: I didn’t know
that.

Harry: I just started doing that.

Mike: I’m going to subscribe today.

Harry: I love Flip Board. And I figured why not make the experience as good as possible.

Mike: Why not. It is always great to have a
good source of content they are some of the stuff on Flip Board is not great,
but I’m sure yours is going to be awesome. Is that just going to be your stuff are you going to curate?

Harry: I’m in a curate too. In fact I’m curating on technology.com too and the stuff I curate there I will also curate on Flip Board.

Mike: Wonderful. We’ll thank you for coming
on to twit. And Lindsay Turrentine, Editor in Chief of CNET Reviews, thank you for coming on Twit.

Lindsey: Thank you. Very fun.

Mike: So tell us a
little bit more about this secret
lab the you have for home automation. Is this going to be generating all kinds of
reviews of these products?

Lindsey: Well we actually have this now. We have
a 12,000 ft.² facility in Louisville, Kentucky. It is a warehouse that we have converted into an editorial
space in a facility where we test larger appliances and small connected appliances. And we rate them, and review them like all the other
technology that we review on CNET. So that is great. There is some exciting
additional stuff that we will be doing that I can’t talk about quite yet. But
that will be coming in the fall.

Mike: Awesome. Wonderful. And Katie Benner with The Information, thank
you so much for coming onto Tech News.

Katie: Thank you,
this was fun!

Mike: Oops this is
Twit. This Week In Tech. Thank you for
coming on. Where 10 people find what you write?

Katie: We are theinformation.com.
It is a subscription site. It is worth subscribing and I hope that you will
join us over at The Information.

Mike: The most important part of that URL is
the word the. Information is easy to remember but don’t forget you have to use
the word the. Thank you so much Katie Benner, and
this has been an exciting adventure for me personally doing the show. I
remember, I used to be right where you are sitting. Sitting right in that chair
looking at Leo do This Week In Tech and thinking there is no way I could do
that. There is no way I could do that. I don’t know how he does it. I still don’t know how he does
it. But it has been exciting for me and I want to thank you all for coming. And
so I get to say what Leo always says, another TWIT is in the can! I
always wanted to say that!